Download - Moosehead Case Study
Instructor: Anne Marie Webb-Hughes, Marketing 1102
SET 1F NOVEMBER 19th
Marketing 1102 November 2009
Table Of Contents
Table Of Contents..................................................................2
Introduction and Problem Statement......................................3
Key Findings and Assumptions for Research...........................4
Target Market Analysis..........................................................6
Competitive Analysis.............................................................7
ALTERNATIVE 1 – INTENSIVE DISTRIBUTION............................8ADVANTAGES.............................................................................8DISADVANTAGES........................................................................8
ALTERNATIVE 2 – EXCLUSIVE DISTRIBUTION............................9ADVANTAGES.............................................................................9DISADVANTAGES........................................................................9
ALTERNATIVE 3 – SELECTIVE DISTRIBUTION...........................10ADVANTAGES:...........................................................................10DISADVANTAGES:......................................................................11
SOLUTION...........................................................................11
IMPLEMENTATION PLAN.......................................................12
COURSE CONCEPTS..............................................................13
APPENDIX............................................................................14“L’elan dans la ville” Advertising Campaign...............................14Bottle and Logo Change............................................................14"L’elan dans la ville…avec toi” Promotional Activity....................15
REFERENCES........................................................................16
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Marketing 1102 November 2009
INTRODUCTION AND PROBLEM STATEMENT
Widely respected as one of Canada’s best, Moosehead beer has been incredibly
successful throughout Canada, distributing to the majority of the provinces in the country.
However, the one province where Moosehead has struggled to effectively penetrate the
beer market is in Quebec. This east central Canadian province is the second most
populous province after Ontario, and is the only Canadian province whose population is
mainly francophone. We feel that the cause of this marketing challenge is due to fact that
the Moosehead Company has not productively advertised their product, together with the
French-Canadian culture, values and beliefs, to their francophone target market.
Having a population with over seven million residents, and consuming
approximately 5.3 million hectolitres of beer each year, Quebec is the second largest beer
consumption market in Canada. Being recognized as a “distinct society” by Prime
Minister Jean Chrétien, the French Canadians of Quebec take great pride in their French
language, culture and sophistication. The residents of Quebec are known to be
imaginative, fashionable and conscious about their health. In this particular province,
cultural identity is strong, and many French Canadians voice their outlook of Quebec
culture being more distinguished than that of English-Canada.
A marketing strategy that will enable Moosehead to successfully penetrate the
Quebec beer market is to incorporate the specific French Canadian cultural vales and
characteristics while advertising to this particular province. Also, taking into account that
they have become accepted as a distinct society in Canada will also build interest with the
francophone residents of Quebec. Given that the company already has the product,
deciding the accurate pricing for the product, where to place it for it to be sold, how to
promote it and what distribution channel to use are crucial evaluations that need to be
made.
What is the most effective distribution strategy that Moosehead Beer Company
can do to penetrate and obtain market share in the province of Quebec? And how can
Moosehead reposition their company to relate to the culture and community of Quebec
citizens?
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KEY FINDINGS AND ASSUMPTIONS FROM RESEARCH
The preferred beer in Quebec based on statistics is Labatt and Molson, which
dominate the beer sales with 90% market share.
Quebec, densely populated with over 7 million residents, has the second largest
beer consumption market in Canada with an estimated 5.3 million hectolitres of
beer consumption a year.
¾ purchased from independent retailers and chains (grocery stores, convenience
store, some at Société des alcools du Québec).
¼ purchased in bars, restaurant, special events, licensed establishments.
As Quebec and New Brunswick are neighbouring provinces, distribution costs
would be significantly lower than shipping to other provinces. However, higher
interprovincial trade barriers contrast this.
The beer market is the second biggest market in Montreal.
Moosehead entered the market in the year 2003 with difficulties in the success.
Most beer products are purchased at convenience stores called “depaneurs” and
not at stores SAQ (Societe d’Alcool a Quebec).
Based on statisitcs, bottled beer is the highest ranking over draught and canned.
There are over 2000 convenience stores by the name of Couche Tard and
thousands of bars/lounges. There are over 600 nightclubs in Quebec alone.
Moosehead brews it’s beer at their brewery in Saint Johns, New Brunswick, and
has a small share of the McAuslan brewery located in Montreal, Quebec.
Moosehead’s total revenue in 2009 was approximately $190 million dollars,
greatly increasing since 2003, which brought in an estimated $130 million.
Moosehead carries a line of various different beers ranging from light and lime
flavoured.
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SWOT Analysis Graph
ENVIRONMENT
POSITIVE NEGATIVE
INTERNAL STRENGTHS:
Offered in 50 states, all throughout Canada, and in 14 other countries
Offer’s a large product depth. Such as Moosehead: light, pale ale, premium dry, dry ice, alpine lager, alpine light, Clancy’s amber ale, and cold filtered light
One of the oldest breweries in Canada – 127 years
Company has high brand awareness
Bottles are highly recyclable – 17 times
WEAKNESSES:
Website is not directed to the demographics of Quebec (their culture and image).
Product is marketed and perceived as “too Canadian.”
The brand image is sought out to be known as generic (green bottle, labeling, name)
Moosehead has already penetrated into the Quebec beer market. However as marketers we must promote it to create brand awareness. The Quebec consumers at this point are unsure of the quality of Moosehead
Lack of experience in the Quebec market since Moosehead has penetrated the Quebec market in 2003 has led to low sales
EXTERNAL OPPORTUNITIES:
Quebec’s population is 24% of the Canadian population. Quebec has the higher consumer spending rates per capita. This means that Quebec represents an important market
The current market of Quebec is booming and room for Moosehead product to capture market share is available
Product mix can be expanded one initial success is create and brand loyalty becomes apparent
Quebec’s beer industry is the second largest market in Canada
Introduce Moosehead light a low carb beer, which targets the health conscientious beer drinkers.
THREATS:
Competitors such as Labatt Blue already have an established clientele in Quebec
Moosehead does not carry a large capital for huge advertising campaigns
Competitors are more experiences in the Quebec beer industry
There are many Government regulations in the Quebec that are associated with the alcohol industry. Such as font and language
Culture barrier between the Anglophone Canadians and the francophone Canadians.
Marketing 1102 November 2009
TARGET MARKET ANALYSIS
The Moosehead brand already has some brand awareness in Quebec, however,
they not attaining high volume sales. We feel this is occurring due to the fact that the
company is not targeting specific demographics based on the particular geographic area
of Quebec. This therefore causes Moosehead to lose sales revenue to companies such as
Labatt and Molson, which are dominating the beer market. French Canadians are known
to be creative, trendy, health conscious and sophisticated and we feel that Moosehead
should keep these precise cultural characteristics in mind when marketing to the French
residents of Quebec.
With the new target market segmentation, we feel that Moosehead needs to target
their beer product to adult men and women, “à la mode” students and career-oriented
individuals, ages eighteen to thirty-five. This product will satisfy each consumer’s
psychographic needs, by raising the level of sophisticated brand image and allowing them
to be associated with a product that is unique and distinguished, just as the French
Canadians see themselves as a culture.
Since the distribution of alcohol in Quebec is through many independent retail
chains and retailers, we choose to use selective distribution through select depanneurs
such as Couche Tard, night clubs, bars and lounges to attract our target market. With a
newly sophisticated Moosehead beer bottle, we believe that the younger generations will
do their best to feel more mature buy purchasing this product, and that the older
generations will be willing to pay a little more for a high quality product to relive their
formative years.
The French are always looking for something different in taste, unique and
sophisticated, and we feel that once they experience Moosehead beer, they will gain a
familiarity of what differentiates a quality product from a standard one.
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COMPETITIVE ANALYSIS
The alcohol beverage industry is a highly competitive market. With revenues for
the Canadian beer market generating 10.9 billion dollars in 2008 representing a
compound annual growth rate of 1.7% for the period spanning 2004-2008. This has
indicated to Mosaic Marketing Corp. that the beer market is extremely profitable;
however within this market there are already competitors that have already dominated the
Quebec market. Labatt Blue and Molson Canadian both share 90% of the market share in
Quebec. With these two major Canadian breweries monopolizing the beer market in
Quebec, there are also the smaller breweries that are in competition with Moosehead as
well. These small beer brands include Brasseur Du Nord and Brasserie McAuslan
Brewery. An advantage that Moosehead has over these smaller breweries is, Moosehead
has the largest market share for the smaller breweries in the rest of the Canadian sector.
Through our research Moosehead beer has already penetrated the Quebec market in 2003,
however sales in Quebec for Moosehead beer are low. Molson and Labatt Blue have
marketed their company to meet the needs and demographics of the Quebec market by
promoting and advertising their beer’s quality, image, and uniqueness; however
Moosehead has not been successful with this. Another advantage that Moosehead has
over it competitors is Moosehead will have an image of a premium lager. We believe this
quality is directed specifically towards the Quebec individuals and gives a huge
advantage over the two dominating competitors, which we will utilize to our advantage.
Three alternatives have thus been devised in the distribution of the Moosehead product.
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ALTERNATIVES
ALTERNATIVE 1 – INTENSIVE DISTRIBUTION
Another way for Moosehead to enter the Quebec market is to distribute to as
many independent retailers as possible in order to saturate the market. This includes all
bars, restaurants and nightclubs as well as all types of retailers such as depanneurs and
grocery stores. In order to distribute intensively, Moosehead would need to convince
retailers to carry its products. Thus, a pull strategy would be employed to generate
consumer attention. Moosehead will advertise heavily through radio and billboards to
promote awareness and encourage consumers to go to their local convenience store or
neighborhood bar and ask for the product.
ADVANTAGES Because the Moosehead brand already exists in Quebec, retailers and consumers
will naturally show interest in carrying and consuming Moosehead beer.
Due to the fact that there will be more exposure of the product, Moosehead will
have a greater opportunity for brand awareness, being available in numerous
depanneurs.
By having Moosehead be more available to the public, we could charge a lower
price (for example, a price of $12. 99/ 12 pack), allowing the product to become
for affordable for its consumers.
DISADVANTAGES ·Moosehead would have to negotiate many contracts and agreements when trying
to get their product out to as many retailers as possible. This could be costly and
time consuming.
Overexposure of the brand could cause consumers to perceive Moosehead as a
generic brand which is less valuable and less interesting than more illusive
brands.
There is a greater possibility for brand dilution if the Quebec public perceives
Moosehead’s market saturation as overwhelming.
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ALTERNATIVE 2 – EXCLUSIVE DISTRIBUTION
For our second alternative, we contemplated using the Exclusive distribution
strategy. Quebec is infamous for it’s party scene, including nightclubs, bars and lounges
which make up numbers of over 40 + in Quebec’s most popular city, Montreal, alone.
There is a huge market made up of individuals who enjoy drinking, spending money on
alcohol, and have strong psychographic values regarding their overall image. A large
percentage of the population between 18-30 years of age who inhabit most nightclubs
find happiness in looking good and feeling good. This not only includes the clothes they
wear and their body image, it includes the drink they are holding and drinking which
affects how others view you. Therefore, distributing Moosehead beer exclusively in
nightclubs and bars in Montreal alone creates a value perception. Montreal being the
most “hip” city of Quebec would give the impression of extreme value through the use of
exclusive geographic territories. Moosehead would therefore be the “Lacoste of beer”,
where drinking it then is based half on how it tastes/makes you feel and half of the image
you get when you drink it. There is huge potential based on what we have researched
about Montreal psychographics…but there are also some disadvantages, which resulted
in our overall decision to dismiss this alternative.
ADVANTAGES Creates a value and evokes a perception of “rarity” and “classiness”.
Limits the cost of licensing vendors and retailers to sell the product.
Allows the company to more carefully regulate their inventory by limiting
production.
DISADVANTAGES This is a potential risk when considering a new/currently under popular product
which may not take off.
Diminishes the possibilities of sales by not expanding to other demographics (aka
at-home drinkers).
May be too much of a change from previous “low class” image of the brand.
Our main disadvantage, which is too much of a threat to ignore, is the statistic that three
quarters of beer produced is for at home drinking (as mentioned in the SWOT Analysis).
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By choosing an exclusive distribution approach, we ignore three quarters while focusing
on the one quarter that purchase beer solely when they are out. For this reason we have
come up with an alternative that encompasses both “at home” drinkers and “social”
drinkers.
ALTERNATIVE 3 – SELECTIVE DISTRIBUTION
When considering distribution intensity, selective distribution lies between
intensive and exclusive. This system would have Moosehead enter an agreement with
select distributors in Quebec who would have authorization to sell the product. It would
help Moosehead maintain a classy image by focusing distribution on higher end
establishments such as nightclubs and restaurants, while also allowing them to utilize
certain distribution agencies such as depanneurs which will attract the large demographic
of beer drinkers at home. The implementation of selective distribution would require
Moosehead to form need recognition in the minds of consumers through push strategies.
The focus here is on creating value for the Moosehead brand through a series of
promotional campaigns to heighten consumer awareness. Once that brand awareness has
been established, we believe that Quebec consumers will be more likely to seek the
Moosehead brand at select retailers. While there are many advantages to choosing
selective distribution methods, Moosehead must also be aware of any disadvantages to
using this implementation plan.
ADVANTAGES: Retailers will be more inclined to sell the brand if there is an associated value and
possibility for higher profits.
Moosehead can select the channels for which they believe will benefit the image
and sales of their product.
They have more control over the consumers perception of higher value or image
of their brand.
Once the customer perceives value in the Moosehead brand, there will be more
likelihood for repeat customers or brand loyalty.
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DISADVANTAGES: They will have to market themselves in a way that makes consumers “seek them
out”. For example, creating a psychological need in consumer behavior may be a
challenge from a marketing perspective.
This could be costly both from an advertisement perspective and a distribution
perspective
There are many competitors in the Quebec market who are also on the selective
level of distribution.
They are limiting the amount of distributors resulting in the possibility of a
smaller target market.
SOLUTION
Why did we make the decision to choose the selective distribution strategy? First
of all, Moosehead needs to implement a new image, which is more appealing to Quebec
culture. At the moment they are not representing the lifestyle characteristics and the
values for which Quebec encompasses. In order to really connect with Quebecois culture,
Moosehead needs to reposition their brand with a classy, elegant, artistic feel that would
be appreciated and valued. Through the use of selective distribution, Moosehead will
become the desired brand label of Quebec. Although we may be sacrificing our potential
volume of sales by limiting distribution channels, we feel that this is a necessary change
in order to create the perception of exclusivity. In order for selective distribution to work,
Moosehead will engage in a push strategy involving a series of advertisements and
promotions, which will support their new brand image and product line. Our company
will evolve into the title ‘MH’ (pronounced em-ash) so that Quebec consumers can relate
to a classier name. Furthermore, this method gives us the opportunity to distribute
through select depanneurs as well as nightclubs, bars and restaurants. The use of indirect
distribution will allow Moosehead to develop relationships with select retailers who will
ultimately benefit from carrying the desired product. As these relationships grow, there
will be an opportunity for a vertical marketing channel to develop, where Moosehead will
work alongside retailers to promote their brand. By limiting our distribution agencies to
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only these select retailers, Moosehead will also have more control over who can sell their
product and ultimately, how the Quebec consumer perceives their brand.
IMPLEMENTATION PLAN
Work with creative team to develop elements of a new Moosehead Beer image.
This includes changing the brand logo, the product’s bottle design and adjusting
the brand name of the product to appeal to the Quebec citizens. We will develop
an advertising campaign to launch the new and improved Quebecois design. (see
Appendix for details on the changes)
Arrange with Moosehead to allot 3% of their total revenue, which is valued at
approximately $5.7 million for future endeavors regarding brand buildup.
Arrange contracts with the retailers that will eventually carry the brand and cease
distribution to retailers not apart of the new selective strategy. This means signing
with most nightclubs, bars, lounges and select depaneurs namely ‘Couche Tard’
and other higher end convenience stores.
Instill a relationship between the wholesaler’s at Moosehead and the retailers in
the Quebec region in the attempt to form a vertical marketing channel.
Moosehead will ensure that the retailers see a value in their product in order to
keep their competitive edge.
After developing a relationship with such retailers, we sign a contract ensuring
that our product will not be sold under a certain price. Our launch price will stay
at the competitive based price of $14.99. This allows the product to receive the
perception of increased value by the $2.00 increase, but also keeps us $1.00 below
our main competitors, Labatt and Molson.
Once our “behind the scenes” work is complete and MH is part of our retailer’s
inventory, we will launch our advertising campaign entitled “L’elan dans la ville”.
(see Appendix for details on the campaign)
After creating attention, interest and desire for MH based on the campaign, we
will introduce the new MH promotion that will be featured at Couche Tard
independently. The promotion ties into the current campaign and is called “L’elan
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dans la ville…avec vous” (translated: The moose is in the city…with you.) which
will only take place for 2 months. (see Appendix for details on the promotion).
Continuing with this plan for a few months, we will then review our sales increase
or decrease in the Quebec region to measure the effectiveness of our strategies.
If the actual results match what was hoped for, we will continue with our
advertising campaign and continue to distribute selectively. In time, we may
choose to raise the price after value has been created to match directly with our
competitors.
COURSE CONCEPTS
Integrated Marketing Communications (Appendix)
Contest (Appendix)
Demographic and Psychographics (page. 5)
Product Line Depth (page. 4)
Intensive Distribution (page. 7)
Exclusive Distribution (page. 8)
Selective Distribution (page. 9)
Brand Image (page. 5)
Logo (Appendix)
Promotions (Appendix)
Brand Repositioning (page. 4)
Vertical Marketing Channel (page. 12)
Competitors (page. 7)
Indirect Distribution (page. 11)
Market Share (page. 4)
Pull Strategy (page. 7)
Brand Awareness (page. 8)
Brand Dilution (page. 8)
Market Saturation (page. 8)
Need Recognition (page. 10)
Push Strategy (page. 11)
Retailers (page. 11)
Wholesalers (page. 11)
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APPENDIX
“L’elan dans la ville” Advertising Campaign
To attract Quebec consumers, Moosehead has come up with a campaign
specifically for the geographic region of Quebec. They will be featured mainly in Men’s
magazines such as GQ, Esquire and Maxim as well as classier women’s magazine’s to
reach the demographic. The campaign that we have entitled “L’elan dans la ville”, which
translates to “The moose in the city” has been created to attract our classy, artistic and
trendy target market as mentioned prior. It features a line of models depicting our market
(trendy men, classy women, young club goers etc.) with the head of a moose in a social
situation, somewhere in the city (a club, lounge, bar, event, on the town etc.). These
advertisements will create a hype based on the strange nature and abnormality of the
image portrayed. After what we have learned about Quebec individuals, they will be
attracted to the artistic and classy mix of the advertisements as oppose to the “all
Canadian, rowdy and rustic” image of the current Moosehead line. A sample
advertisement from the “L’elan dans la ville” campaign is featured on the next page.
Bottle and Logo Change
The name “Moosehead” depicts an “all Canadian” feel and brand image to the
beer brewed in New Brunswick. For the majority of Canadian drinkers, this works but for
the psychographics in Quebec it does not, leading to the lackluster sales they have
experienced in the province. Therefore, to avoid an entire name change, Moosehead will
be known as “MH” in Quebec, which translates to the pronunciation ‘em – ‘ash’ in
French. This name is classier and more appealing to the consumers we are targeting. As
for the bottle logo, the current bottle does not play into the image of “MH” thus we have
come up with a innovative new design which features the following
o the new “MH” Logo, simple and in classic font.
o an image of the city, with the city lights creatively shaping a Moosehead.
o Moosehead’s current color scheme as to not deviate too much from the
original (gold, green and red).
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“L’elan dans la ville…avec toi” Promotional Activity
As apart of the launch of ‘MH’ a promotional
activity will be released in the form of a contest. This
is meant to create hype and excitement and thus drawn
in consumers who will participate. It involves an
“under the cap” contest, provoking consumers to
purchase ‘MH’ and find the winning cap. The prize
would be a night in the city of Montreal with three
friends, all expenses paid and a night’s supply of free
‘MH’. Hotel, nightclub cover, limousine and dinner
would all be apart of the contests package. This would
satisfy the target market that we are after as well as
solidify our attempts to make the “L’elan dans la ville”
campaign the next big campaign such as “Got Milk”.
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REFERENCES
Brewers Association of Canada. (2009, October 19th). Domestic Sales Bulletin.Retrieved November 14th, 2009, from The Brewer’s Association of Canada website:http://www.brewers.ca/UserFiles/Documents/Sales%20Bulletins/2009
Beer Pal (2009, September 20th). Evaluation of Moosehead Beer Lager.Retrieved November 13th, 2009, from Beer Pal wesbite:http://www.beerpal.com/Moosehead-(Lager)-Beer/3568/
Mel & Rose (November 18th, 2009). Prices of Moosehead Beer in Quebec.Retrieved November 18th, 2009, from Mel & Rose Website:http://www.melandrose.com/istar.asp
Chowhound (May 15th, 2006). Beer Prices in Quebec.Retrieved November 15th, 2009, From Chowhound Website:http://chowhound.chow.com/topics/109381
Hugh Topham (July 10th, 2008). Montrealers, Beer Prices – Quebec vs. OntarioRetrieved November 12th, 2009, from Secure website:https://secure.neap.net/pipermail/montrealers/2008-July/014064.html
Blork du Montreal. (2004, November 26th). Buying beer in Quebec.Retrieved November 12th, 2009, from Blork Du Montreal’s website:http://beerblog.genx40.com/archive/2004/november/buyingbeerin
Sara Minogue. (2003, May 5th). When to Spend in Quebec.Retrieved November 12th, 2009, from Sara Minogue, Strategy website:http://www.strategyonline.ca/articles/magazine/20030505/quebec.html
Brian O’Neal. (1995 December) Distinct Society: Origins, Interpretations, Implications, Retrieved November 12th, 2009: http://www.parl.gc.ca/information/library/prbpubs/bp408-e.htm
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